One of the most important decisions EU needs to make in recent decades is about Brexit. Because of the conflicting decisions on the topic, Brexit looms over EU with its baggage of uncertainty. The next steps about Brexit affect United Kingdom and European Union all the same. However, Portugal also needs to carefully observe the proceedings. Here are the reasons why.
The rather obvious outcome of Brexit will be the financial changes between the UK and EU countries. Whether the agreement goes through or falls through, it is certain that UK’s commercial partners will all be affected.
Possible effects of Brexit on Portugal:
Portuguese economy can lose up to 0,4%
Exportation can decrease up to 26%
Decrease in tourism
Impact in financing
Portugal’s economy relies rather heavily on tourism. It is not the only income source of the country, of course, but it is still a big source. A large percentage of Portugal’s tourists being British, the industry will definitely be affected by Brexit.
In the case where the UK and EU do not come to an agreement, there might be several introductions for commercial barriers. In this scenario, Portugal might suffer some serious damage. UK is Portugal’s 4th biggest market for exportations. So, if a disagreement occurs between the UK and EU, Portugal’s foreign trade might need to seek out new options.
Another concern for both countries is about people. UK is the main destination of Portuguese emigrants. Also, British community constitutes the third biggest European community in Portugal. Therefore, a potential problem affects both sides quite negatively.
At this point, it is predicted to have an increase in the number of sales of Portuguese real estate to British people. It has already been reported that Portugal enjoys an influx of British citizens.
However, it can be clearly seen that if the UK leaves the EU, social interaction and circulation between Portugal and the UK will be decreased.
The effects of Brexit on the Portuguese real estate market are not easy to pinpoint at the moment. British investors contribute a lot to the scene of Portugal real estate investment. Yet, is it going to continue? The cloud of uncertainty accompanying Brexit also shadows Portugal real estate market.
Different property developers have different ideas on the topic. For QP Savills in Quinta do Lago, 2017, and 2018 have been “among the best years ever”, with more Brits than ever deciding to invest in the Algarve. On the other hand, some developers get the feeling that the British are “hanging on their money in fear of a no-deal”. Portugal Golden Visa Program plays a crucial role here. Offering Portugal a residency in return for an investment, Portugal Golden Visa might be an effective tool for the British in the future.
Portugal’s Tourism Sector Remains Rather Unaffected
Since Brexit’s footsteps are started to be heard globally a few years ago, Portugal’s tourism and real estate sectors were on the edge about the future effects of the United Kingdom leaving the European Union. In fact, for a long while, authorities were sure that the event will have negative repercussions for Portugal’s economy. As British investors and citizens constitute a great percentage of the number of Portugal’s foreign residents and tourists, these forecasts undoubtedly seemed realistic. However, the reports of Statistics Portugal show that, including 2019, the number of British tourists visiting Portugal has never stopped increasing since 2013. Within this 6-year period, the number of British tourists visiting Portugal increased by around 51 percent. Moreover, the number of overnight stays already increased by 32.2 percent. Thus, it is seen that British citizens did not lose their interest in Portugal; on the contrary, the popularity of the Iberian country continues growing in Britain. Apart from all the measures taken to keep the tourism alive, the Portuguese government also plans to continue treating British patients with their European Health Insurance Cards. Knowing Britain’s huge importance for its tourism and real estate sectors, Portugal is ready to provide healthcare services to British citizens even after Brexit.
Can British Citizens Have Residency in Portugal after Brexit?
UK’s official exit from the European Union took place on January 31st, 2020. However, due to the magnitude of the event, there is a transition period that starts on February 1st, 2019, and goes on until 31st of December, 2020. This transition period is a second chance for British citizens who failed to establish their residence before January 31st of 2020.
According to the announcement made by SEF (Portuguese Immigration and Border Service) on January 13th, 2020, British citizens who were able to obtain their Portuguese residency before the official date of Brexit will not be affected by the transition. Yet, British citizens who did not establish residency rights before January 31st will have to establish the rights to residency until December 31st, 2020. This, of course, is only possible if the applicants are able to provide the authorities with sufficient evidence about their Portuguese residency before January 31st. These documents might be tax returns, rental agreements, property deeds, or employment contracts depending on the particular application. Throughout this 11-month transition period, British citizens who already reside in Portugal may continue to live, study or work in Portugal.